A fast(er) road to FAST?
This article was originally published on the 131st edition of the IABM Journal: https://theiabm.org/journal-131/
As any other player in M&E industry, we are witnessing growing interest in FAST and AVOD channels, especially as they offer a response to the SVOD churn we are witnessing.
Interestingly, companies are increasingly looking to us for solutions to repurpose content—much of which is destined for these very channels. Generating new revenue streams from existing content is every company’s dream, right? We've been helping clients develop impactful strategies for content repurposing, and as tech providers, we bring a unique perspective to this trend.
The challenging road to AVOD and FAST channels
The “Streaming Wars” is on everybody’s lips and 2024 has brought together all in agreement: with the SVOD churn now a reality, content providers are turning to FAST and AVOD to diversify channels and revenues (recommended Kantar's extensive research).
Subscription costs increased by 44% over the last year (a mid-2024 Forbes survey quantified these streaming trends) and consumers are unwilling to pay more or subscribe to more platforms. We are not short on statistics illustrating this issue, and the big streamers (Netflix, Amazon, Disney, etc.) seem to take turns announcing their latest big-budget acquisitions to attract viewers through exclusive content.
Reports, including IABM’s, largely agree: in their need to diversify channels and to prepare for SVOD churn, content providers have to turn to FAST channels and AVOD. The literature on their benefits is prolific, showing those platforms can become a solid revenue stream, a retention tool, an alternative to traditional channels when in crisis, and so on. FAST distribution is already gaining special prominence in the U.S. market and is proving a game-changer in news and sports (the spring 2024 printed edition of Streaming Media had very insightful articles on this topic).
At the same time, these same reports highlight that generating revenue from FAST, AVOD or even Social Media requires high volumes of content to start to see some money. Simply put, these channels tend to reward quantity over quality.
Here lies the challenge: content must be adapted for those channels. Our observation is that after moving from one crisis to the next, companies are reluctant to dedicate resources and headcount to the task of repurposing content or do not yet see the value in what was once marginal revenue. Also, FAST is performing very well in the US but is not yet mature in Europe. There’s insecurity and skepticism, so there’s no will to risk and invest.
And if we look at AVOD and Social Media, a new challenge appears: the necessity to be quick. These platforms thrive on immediacy; they are now proven to be a primary source for news (in the US 54% of Americans now consume at least some news daily via social media — numbers are a little lower in Europe).
The DPP captures this sentiment in their latest report of Demand vs Supply series at the IBC 2024: “In general we feel the pressure of organizations to make more, faster, for less”. We feel the same.
So here is what we are seeing from our viewpoint as a technology provider: companies do want to generate profits repurposing assets, but this requires that the cost of repurposing the content be significantly lower than the revenue generated from FAST and AVOD. To achieve this, they turn to technology providers to get the job done.
AI to make more, faster for less
Here is a use case we frequently encounter: companies with extensive back catalogs seeking to monetize them. Rather than allowing these assets to sit unused, the clever strategy is to repurpose them for the previously mentioned FAST and AVOD channels.
Given the challenges outlined above, any tool that might help FAST and Social Media teams in cleaning up and reformatting hundreds of files is generating significant interest. At Knox Media Hub we are already observing powerful results (soon to be published) from companies leveraging our Smart Trimming tool — an AI powered feature that automatically detects and removes all the technical non-relevant elements such as color bars and slates— to get their back catalog ready for publishing. This tool is saving countless hours of manual drudgery editing, representing a small investment that both reduces operational costs and helps generate new revenues with positive contribution margins.
Is AI the way forward then? It might be. Amid all the buzz and excitement surrounding AI, we are reaching a point where both tech providers and buyers are discovering real value in this technology, presenting here a strong use case. Consider this second example - AI transcription for quick translation and subtitling; it is to be seen everywhere trade shows and markets, with FAST and AVOD channels being the first distribution platforms to adopt it. While AI may not be perfect, it significantly accelerates localization workflows, particularly for these channels.
Research findings by Caretta research released last September illustrate well how AI is being adopted and shows that our instincts are heading in the right direction. First, 61% of buyers and vendors report seeing AI replace routine and repetitive tasks (hence the case stated above), and making work easier and faster: exactly what media companies need to enter FAST and AVOD channels. Secondly, buyers find it easier to adopt this technology through existing vendors that embed AI functions. In our case, our AI features, combined with orchestration and automation tools, enable clients to tap into these new revenue streams at minimal cost.
Laying the groundwork for a 360 distribution strategy
In a broader context, atomization and fragmentation of channels appears to be the “new normal”. The media and entertainment industry has been evolving these past years towards a 360-degree distribution model, where everyone will have a presence across multiple platforms. This new standard applies to all stakeholders, including media houses and traditional broadcasters, particularly in the digital landscape where everything is more fragmented and niche.
As media consumption habits shift rapidly, we as technology providers must be prepared to support any distribution channel or production method that emerges, enabling clients to compete across formats and distribution strategies.
We understand that adaptability and scalability are crucial. Legacy technologies and closed systems will not meet the demands of this emerging model; we need to be extremely flexible. Over the past few years, we’ve heard that media technology has undergone more transformation in five years than it has in the past 30. So, to thrive, media companies will need a highly efficient and scalable infrastructure. This is why Knox Media Hub was built in the cloud in the first place; however, it now extends beyond that. There is a growing need for interoperability and communication with other systems, and this flexibility should define the culture of your organization and the architecture of your services.
Knox Media Hub Editorial team
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